Setting up an Internet business that sells products with no inventory is easier than it sounds. Two proven models exist to accomplish this goal with minimum problems. The first, affiliate marketing, offers business owners the chance to sell both physical and digital products on their website or other Internet property. The business owner simply puts a special link with a tracking code that sends the buyer to the product purchase screen. The business owner then earns a commission for each sale. The other model is drop shipping. This is more involved, but offers a much wider range of physical products to sell.
Sign up for an affiliate program. Dozens of companies offer the chance to become affiliates and earn commissions for selling the products they have listed. Clickbank.com (see Resources) has the largest collection of popular digital products such as eBooks and training courses. CJ.com (see Resources) has a large collection of digital and physical products, including products from big names like Sony and 3M. Amazon.com (see Resources) also offers an affiliate program to sell their products.
Fill in the payment details for your affiliate profile. This is how the affiliate programs pay you for your sales. Common options include payments made via check, PayPal or direct deposit.
Create a website or web 2.0 property such as a Squidoo lens or Blogger Blog that promotes the product or product you are selling.
Insert your special affiliate link in various locations on the web page, including a button that invites the viewer to purchase the product. Consult your affiliate program website for your affiliate code.
Drive traffic to the web page that contains your affiliate links. This includes article marketing, posting on Facebook and Twitter, creating YouTube videos, and anything else that spreads the word about your web page.
Research companies that provide drop-shipping services for their products. Research may be conducted at drop-shipping directory sites such as Salehoo and Worldwide Brands (see Resources) or ThomasNet (see Resources). The directories require a membership, but they filter the companies listed by quality of service and the products they sell. ThomasNet is a general business directory that has contacts for all manner of products.
Contact a few suppliers, via phone where possible, to discuss service terms for the products you wish to sell. In general, drop-shippers receive an order from your website and ship the product directly from their inventory to the customer. Payment terms and website integration options vary for each supplier.
Create a website that features the products offered by your drop-shipping supplier(s). Apply a reasonable markup percentage to your product cost. Offer a variety of payment options to make it as easy as possible for shoppers to buy your products.
Pass the order invoice from your customer to the drop-shipping company. This may be automated depending on your eCommerce platform and the sophistication of your drop-shipping supplier(s). Pay the drop-shipper the agreed upon price and keep the difference as profit.
Resolve any customer service issues that may arise from the transaction. In any business there are customer complaints and refund requests. The protocol to address such issues depends on your particular business structure. Some drop-shipping companies may handle this service for you.